U.S. EPA Contaminated Site Cleanup Information (CLU-IN)

U.S. Environmental Protection Agency
U.S. EPA Technology Innovation and Field Services Division

For questions & comments about technology developer tools & resources, please contact:

Carlos Pachon
Technology Integration and Information Branch

PH: (703) 603-9904 | Email: pachon.carlos@epa.gov

Business Planning and Funding

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Funding Concepts and Techniques

Selecting Funding Types

An understanding of the general types of funding may assist a company in selecting options that are appropriate and realistically attainable for the type of venture. Funding of technology development can be grouped into three types: Equity financing, debt financing, and specific-project financing. Specific-project funding may include grants and cooperative agreements from government organizations, corporations or non-profits. Within each of these types, the need for funds may be short term or long term.

Often, a company may combine more than one of these types to attain enough money for its activities: The type of funding that is most suitable for a business is dependant upon the nature of the business, the types of products and their perceived market potential, cost structure, amount of existing assets and debt, credit worthiness of the company, appeal of the business, and the stage of the business' development. The sources below provide tools for use in learning about funding types and how to decide which is most appropriate and feasible for a company.

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Equity Funding

Equity funding involves selling part ownership of a technology or company to the public through the sale of securities, to venture capital companies, to "angels," or through business combinations. Angels are private investors who take a direct interest in the business. Business combinations include cooperative agreements, joint ventures, strategic alliances, and other arrangements that allow businesses to share costs, risk, facilities, equipment, and expertise. Although equity funding usually applies to selling an interest in the company, proceeds from equity sales could also be applied to a specific technology. Many technology firms use funds from their personal assets, friends and family, especially in the start-up phase of the business.

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Debt funding

Debt funding is primarily short and long-term loans. This source of funds may be attractive because the principles of a business do not have to sacrifice any ownership interest in the company. Loans may be obtained from banks, individuals, family and friends, suppliers, and other sources. A technology developer or supplier may consider among several types of debt funding, including commercial business loans, equipment financing and leasing, real estate financing, and federal or state loan, loan guarantee, and insurance programs. The resources listed below describe the various types and indicate potential sources of credit.

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Funding a Specific Project

Some funding may be dedicated to a particular project, such as a demonstration of a particular technology or group of technologies. Specific projects may be funded via cooperative agreements, joint ventures, strategic alliances, and other arrangements that allow businesses to share costs, risk, facilities, equipment, and expertise. Some technology funding sources are also organizations that will be partners in testing and demonstration or may provide resources in-kind, such as laboratory facilities or analytical services. For example, a technology developer may obtain a grant from the Department of Defense (DOD) to demonstrate a technology at a DOD installation or conduct testing in a DOD laboratory.

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